I hear statements like these all the time. Growth can be a wonderful thing. It means that someone likes your products or services. It means that money is coming in, or at least that investors are reasonably sure that money will be coming in. And if growth comes, it means that your team is strong. While there may be some tension, basically everyone is working well together.

The problem is that the actuality of growth can bring along a few, ahem, minor issues that, if not addressed, can turn rapid growth into a period of great pain. Going from, say, five employees to 10 isn’t so bad, and even 10 to 20 or 25 can be pretty smooth. It’s when you start moving past that point that the potholes — in motivation, leadership and teamwork — really start to appear.

Let’s start with that ever-popular topic, motivation. Now, you might be wondering how motivation can be a problem; well, it depends on how big you are. If you’re 10 going to 20, motivation issues are probably minor or nonexistent. But if you’re going from 50 to 100, well, you may already be seeing the first canaries in your motivation coal mine.

When the company is very small, everyone is motivated: They wouldn’t be there if they didn’t care deeply and passionately about the business. But, as you get bigger, it gets harder. How well are you assessing the enthusiasm of the people you hire? If they aren’t excited by the description of the company, motivation will be limited. Assuming they are excited, that’s wonderful! But you only have a narrow window to turn that excitement into lasting motivation. You also need to know how to keep it going; motivation isn’t something you do once and then forget about. Like a cup of coffee, it wears off after a while. Also, like coffee, too much isn’t always a good thing. Finally, as a company grows, the image of the organization will change, sometimes a lot, sometimes a little. Those changes can affect the motivation of the most dedicated employee; how are you managing that process?

One of the advantages of being small is that everyone knows one another, everyone talks to one another, everyone argues with one another and, with any luck, no one argues too much. One of the advantages of knowing people well is that you can say things to them that you would never say to more casual acquaintances. Any new team members will need to be brought up to speed on this, just as with any other aspect of the company. The presence of new people means that everyone needs to adjust and recalibrate how to speak to one another. DEC failed to account for this effect during its period of rapid growth, with devastating consequences. (If you don’t know what DEC was, Google “Digital Equipment Corporation.” The fact that this is a possibility demonstrates how devastating those consequences were.) How well your team leaders understand this process of integrating new people into the team and are able to manage it will shape the trajectory of your company for months or years to come.

Leadership also undergoes some pretty significant changes as a company grows. If it doesn’t, you’ve got problems. A few dedicated people can work very well together without any formal leadership. Nonetheless, even in the most egalitarian team, someone is always in charge, even if that person doesn’t always know it. On one team, everyone pointed to a fellow named Bob when asked who the leader was; Bob, however, was quite convinced that no one was in charge.

As a company grows, however, this sort of informal leadership can become more than a little problematic. That doesn’t mean that you need to jump to a massive hierarchy and strict titles like “Software Engineer I,” “Software Engineer II” and so on. The trick here is to recognize what leadership means: No matter how charismatic the CEO, no matter how energetic, he can only do so much. The company needs people whose job is to convey the CEO’s vision and make it personal for individual team members. Whether you call them leaders, managers or lieutenants, the role is the same: Keep the troops inspired, focused and engaged; bring out the most in them. Where will those leaders come from? Whether you promote from within or hire from without, they need to know how to inspire high performance with your people and in your corporate culture. Leadership is the infrastructure upon which growth rests. One of the biggest problems growing companies have is finding, or developing, effective leadership.

Rapid growth can be a blessing or a curse. How well you avoid the potholes along the way will determine whether doubling leads to excitement and success or toil and trouble.

Stephen Balzac is an expert on leadership and organizational development. A consultant, author and professional speaker, he is president of 7 Steps Ahead, an organizational development firm focused on helping businesses get unstuck. Steve is the author of The McGraw-Hill 36-Hour Course in Organizational Development and Organizational Psychology for Managers. He is also a contributing author to Volume 1 of Ethics and Game Design: Teaching Values Through Play. For more information, or to sign up for Steve's monthly newsletter, visit 7stepsahead.com. You can also contact Steve at 978-298-5189 or steve@7stepsahead.com.

This story, "Growing a business: Double, double, toil and trouble" was originally published by
Computerworld.